Cities and the Urban Land Premium

Cities and the Urban Land Premium

Henri L.F. de Groot, Gerard Marlet, Coen Teulings and Wouter Vermeulen

After a long period of suburbanisation, cities have been in vogue again since the 1980s. But why are people prepared to spend far more money on a small house in the city than on a large house in the countryside – and why doesn't this apply to all cities? This book shows that the appeal of the city in the 21st century is not only determined by the production side of the economy, but also by the consumption side: its array of shops, cultural activities and, for example, an historic city centre. All these factors not only translate into land prices that are worlds apart but, in terms of production, into different wages for urban and rural citizens. This book maps out these differences.

Chapter 9: Agenda for the future

Henri L.F. de Groot, Gerard Marlet, Coen Teulings and Wouter Vermeulen

Subjects: economics and finance, urban economics, urban and regional studies, cities, urban economics


Prices are determined by three factors: location, location and location. Old real estate brokers’ maxim. This old maxim is the shortest summary imaginable for this book. Location is the one and all-deciding determinant of the price of real estate. In many parts of the Dutch countryside, a square metre of land for residential purposes yields less than EUR 20; for the most attractive bits of land in Amsterdam and The Hague, the price is a factor of 200 higher. That price difference between ‘city’ and ‘countryside’ has more than doubled in the past 20 years. The prices in the north wing of the Randstad area, around the Brabant city triangle of Breda–’s-Hertogenbosch–Eindhoven, and in the inner city of Maastricht have risen twice as fast during those years as the prices in Zeeuws-Vlaanderen or the rural areas of the provinces of Groningen and Drenthe. The importance of location has only grown. It has turned out that these differences in value can be explained. The accessibility, by car or public transport, the wage level in the surroundings, the availability of amenities such as shops, bars and performing arts, the presence of a seventeenth-century city centre, or attractive natural amenities – all these factors are highly relevant to the price of a plot of land.

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